|New Threads Only:|
|New Threads & Replies:|
Forum List » Guru News and Commentaries|
Guru News, Stock picks and commentaries
George Soros Profits from Bill Ackman for Second Time in Recent Months
Posted by: Holly LaFon (IP Logged)
Date: August 2, 2013 10:11PM
No trade filings for George Soros have crossed the wires this week, aside from a continued reduction of Exar Corp. (EXAR) shares, but CNBC reports that the legendary investor has taken a stake in Bill Ackman’s highly publicized short, Herbalife (HLF). The move marks a second time in recent months that Soros has profited from one of Ackman’s enterprises.
Soros’ purchase of Herbalife is reported to be among his top three holdings, according to CNBC. Shares of Herbalife popped almost 10% on the news and closed at $64.09 per share on Friday after sliding 2.18%.
Ackman bet more than $1 billion on a Herbalife short in December 2012, announcing the position with a scathing and lengthy presentation on the company. After temporary faltering, Herbalife’s stock bounced back and is up almost 95% year to date, surpassing its price in the months leading up to the short announcement.
Ackman said he expected other shrewd investors to take advantage of the price drop resulting from his presentation to take the other side of his bet at a reduced price. Indeed, gurus Carl Icahn, Daniel Loeb and Joel Greenblatt scrambled to do just that in the first quarter. Soros, however, saw further upside as of July.
Soros moved in on another Ackman stock in April, buying a 7.9% stake in J.C. Penney (JCP), making him the company’s fourth largest shareholder. At that point, JCP had declined 58% in a year. It then gained 7% on the news of his stake.
Ackman took an activist stake in JCP about two years ago, and was instrumental in replacing CEO Myron Ullman with Ron Johnson, a former Apple executive. After years of refocusing the retailer with name-brand clothes, the replacement of promotional coupons with generally low prices and the inclusion of Sephora makeup and skin care stores, the stock has yet to respond.
Soros may see a very cheap stock price in JCP, a bottom on the stock headed toward a turnaround, a ray of hope with the return of CEO Mryon Ullman in April, or something else entirely.
In total, he owns more than 17 million JCP shares. In the first quarter, JCP announced a net loss of $348 million, increased from $163 million the previous year, and a 16.4% decline in total net sales to $2.64 billion.
See George Soros’ portfolio here. See Bill Ackman’s here.
Not a GuruFocus Premium Member? Click here for a 7-Day Free Trial.
Guru Discussed: George Soros: Current Portfolio, Stock Picks
Bill Ackman: Current Portfolio, Stock Picks
Stocks Discussed: EXAR, HLF, JCP,
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.